Introducing Economic Actualism: Making the Science of Rational Behavior More Rational

By David Billings

Economic actualism uses three simple principles to:

Reduce economic damage
Recognize frustrations
Reap actual benefits
Reward actual production and
Regain your life's vitality.

Abook of discovery from the focal point of our society and our lives.

• Language: English
• Publisher: AuthorHouse
• Release date: Jan 20, 2016
• ISBN: 9781504973342

David Billings

Like most of us, David Billings has spent a life time watching society fluctuate between actualist and nominalist perspectives with both curiosity and dismay. David’s quest began on a camping trip in Northern Ontario when he was eight years old and caught a fish with his bare hands about an hour before an eclipse of the sun. The long drive home, with its progressive re-entry into society, gave him a sense of mission: to find out why we go to such lengths to escape a society which we go to such lengths to create and sustain. The wordless wonder of an eight-year-old was carried through university degrees in commerce, social organization, and human relations as well as economics from Western University plus biological engineering from the University of Guelph. He briefly taught in the business department of Sheridan College. Without accepting any major corporate responsibilities, he has been given a long-lasting critical perspective by working as an independent handyman.

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2016 David Billings. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 01/19/2016

ISBN: 978-1-5049-7335-9 (sc)

ISBN: 978-1-5049-7333-5 (hc)

ISBN: 978-1-5049-7334-2 (e)

Library of Congress Control Number: 2016900565

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

KJV

Scripture quotations marked KJV are from the Holy Bible, King James Version (Authorized Version). First published in 1611. Quoted from the KJV Classic Reference Bible, Copyright © 1983 by The Zondervan Corporation.

Contents

Preface

Chapter One Overview

Chapter Two Certain Deviation

Chapter Three Uncertainty

Chapter Four Social Confusion

Chapter Five Econo-Addiction

A Tale Of Two Viewpoints: Nominalism And Actualism

Afterword

About The Author

To my parents, who always supported an awkwardly actualist son in his struggle with a strangely nominalist world

Preface

Mention the word economics and three quarters of the room will roll their eyes. Economics has often become the subject that confines and torments us, rather than the subject which unites us and frees us. This book aims to unite through its understanding and to liberate through its truth. Yet in the process it may strike some nerves by examining some assumptions that underpin our society. In fact, it examines the process of assuming itself.

Economics is meant to be the study of rational behaviour. Rationality should be liberating, leading to a happy life that affords for fun in its place. Yet this is not economics’ reputation. It has often been called the dismal science. I hope to make economics less dismal.

Economic actualism holds that society is essentially a confusion of nominal and actual wealth. The failure of traditional economics to deal with this confusion in a systematic method is what makes it dismal in the eyes of so many. The work economy stems from the Greek words for house manage, but we have abandoned this sensible goal for the dismal goal of nominal wealth in the form of national economies, corporate growth, international trade and stock prices.

But economics is just one, though a central one, of the humanities. As economic actualism works to unravel the confusion of nominal and the actual, it overlaps into other areas of study. So while economics may seem a dismal science, by improving its shortcomings we will hopefully make all of our lives a little better and our let our spirits burn a little brighter. This is an exploratory book about uncharted territory in the middle of our existence. I hope the discovery process eases your burden.

David Billings,

B.A. (Commerce/Economics), B.Sc. (Eng.)

Chapter One

Overview

Our economic theories don’t work anymore. Perhaps, they never did. Capitalism, socialism and communism all seem outdated. The political leaders who sell them so slavishly seem out of touch with economic realities. Our society, and even our planet, can not afford these dogmatically held errors for much longer.

If capitalism says mankind’s history is that of dominance over nature and communism says man’s history is class conflict and socialism promises redistribution through centralized systems then economic actualism has a new thesis; that mankind’s history is the confusion of actual and nominal wealth.

The process of measurement is problematic in any science. Yet it is a problem which has suffered great neglect by the science of economics. Economic actualism has been boiled down the study of how nominal and actual economic reality differ into three main branches of study: the uncertainty which is created by the act of economic measurement, the manners by which nominal and actual economic data are certain to diverge, and the social feedback systems which help to keep the first two principles under control. At the present time in North American society, our neglect of all three of these principles are combining to mechanically subvert the quality of our society.

Economic Actualism is a new view on economics, and society. This is the first published account of the theory. Interestingly enough, you do not have to abandon capitalism, Marxism, socialism, Keynesian economics or any of the other mainstream ideologies in order to agree with economic actualism.

Economic actualism does not belong to either the political left or right. It sees value in both. However, it is believed that economic actualism brings other economic ideologies into a different light.

Economic actualism gives this new perspective by differentiating between nominal and actual economic data.

Economic actualism strives to discover the means by which the nominal recording of an economic statistic can differ from the actual reality. Without a method to find the single actual economic datum, behind the nominal, we are faced with a seemingly endless number of possible realities when we make a decision. We need a method to find the actual situation behind the nominal façade. Our leaders decide on the macroeconomic scale. But everyone also makes decisions on the microeconomic scale. Economic actualism provides this method.

The factors which increase nominal wealth while decreasing actual wealth, or decrease nominal wealth while increasing actual wealth, can be uncontrollable if left unchecked and are a grave danger to us both as individuals and as a society.

By applying economic actualism, we keep our participation in the economy closer to what we actually intend.

One of the beauties of economic actualism is that it can be summarized in three short principles. The first two are truisms.

The third is that the first two create confusion. This simplicity makes it easy to comprehend. Yet it should also make it easy to expand into areas of social complexity without losing focus.

Economics affects each of us on the personal level, where simplicity is valued. Yet it also effects our society in all its complexity, where the ability to deal with this complexity is essential without losing important aspects of the situation. Many previous theories seem to miss mentioning these three principles.

Economic actualism then, has three essential principles:

1. UNCERTAINTY

In addition to the problems of economic measurement due to diversity and quantification, economics is set by the problems of the uncertainty principle: the act of measuring rational behaviour can alter the definition of rationality.

2. CERTAIN DEVIATION

Some social phenomenon are certain to occur which deviate nominal economic records from actual economic reality. An inversion occurs when a decrease in actual wealth is an increase in nominal wealth, or vice versa. Inversions come in two manners: externalities and ineffectiveness. Economic inversions due to externalities include: spirituality, leisure, preventing damage, environmental issues and idolatries. Actuality can also differ from nominalism due to loss of effectiveness such as financial obligations, conflict, dependence on centralization and error. Inefficiency can be seen as a source of error. Inversions are a subset of deviations, as deviations look at the total quality of life.

3. CONFUSION

The confusion of actual economic status with nominal economic status is a common source of social conflict and debate. Social mechanisms are required to constantly keep the damages from the first two principles in check. Implicit in the economic actualism is the idea of econo-addiction.

Econo-addiction is defined as an unhealthy obsession with nominal economic wealth to the neglect of actual economic wealth. Econo-addiction can be both macroeconomic and microeconomic. It can affect both the individual and the community.

Our society has become obsessed with the idea that our nominal economy must grow every year, even after our actual economy such as our environment, freedom from bad debt, and lifestyle is threatened. Yet despite these actual losses we continue with hazardous nominal economic growth because without this growth, we will not get paid. That may sound crazy, but it is sadly often the truth.

The world is going crazy and economics, the study of rational behaviour, is leading the descent into madness. This descent can be described as the result of not differentiating between the nominal and the actual. The study of economics has well described the invisible hand which allows free markets to self-regulate. The action of consumer demand and producer supply, which can be illustrated by supply and demand curves, brings markets into an equilibrium of price and quantity. But as we shall discuss, the invisible hand is often that of a pyromaniac sparking a match.

Price and quantity are the nominal values which traditional economics limits itself to. Price and quantity are the lifeblood of economics, but they are not the lifeblood of a life.

Value and worthiness are the essence of life but these pose a problem for traditional economics: they are not measured. Price and quantity data are readily available. We all want value and worthiness, but economics delivers only price and quantity.

When we search for value or worthiness using systems that provide only price and quantity and provide no method to estimate the difference, we can get overwhelmed by the infinite number of possible realities the nominal figures depict. These possible realities gain a life of their own, while the actual economic reality becomes an anonymous face in the crowd.

As a result, many of us sadly give up on creating actual wealth. Nominal wealth seems easier to create. We have certifiable numbers from nominal wealth that tell us what progress we are making. The numbers are a quantifiable measure which we come to analyze, even if the instrument which calculates these figures is malfunctioning. It is simpler to accumulate as many nominal figures as possible, then convert them into the actual value and worthiness we planned for in the early stages of life. Yet it is easy to get addicted to the nominal and lose sight of the actual completely.

Econo-addiction is the obsession with creating nominal wealth, even at the expense of actual wealth, an exercise in speciousness. The problem of a price’s inability to describe value is as old as society itself. Yet the history of the twentieth century is predominated with frustration with the discrepancy between nominal and actual wealth. Ideologies such as fascism and communism arose from the frustrations and disappointments from economies that promised much and delivered less.

This obsession with nominal growth increasingly threatens our society. Nominal growth is encouraged, even when it undermines actual growth because we view actual growth as an almost mythological creature we can not account for. If we can not account for it, how can we pursue it? Many of us have given up on trying to find value and worthiness. We have settled for price and quantity.

dreamstimemedium_42000643

©Alphaspirit – Dreamstime.

Figure 1 Econo-addiction is the obsession with increasing nominal records of economic wealth even when it results in a decrease in actual wealth.

Econo-addiction is as real a threat to our society as drug addiction. Both are popular because they create feelings of euphoria amidst a reality of stagnation. Like drug addiction, econo-addiction is a source of delusion which makes us happy in the short term but miserable in the long term. A large proportion of our people and our institutions rely on nominal economic status for their pay before an eventual conversion into some form of actual wealth. But it is easy to lose sight of the actual, and become obsessed with the nominal. The nominal has numerical figures attached to it which render an illusion of irrefutability. The nominal can have rules which provide structure while the actual can place responsibility on the individual he may not feel prepared for. It is easy to covet nominal wealth because it can be so easily seen and verifiable. It comes largely from society while actual wealth, ultimately, comes from within. Nominal wealth, such as money, may not be the goal itself. But for the love of money, many will subject themselves to many sorrows, actual poverty. The love of money, nominal wealth, is the root of all evil. (1 Timothy 6:10).

Our addiction to nominal wealth at the expense of actual wealth takes many forms. But it’s good to consider how other forms of econo-addiction work when considering a specific form of econo-addiction. None of us is totally free of nominalism. We all are at heart, actualists living in a nominalist society. While it is the actual wealth we want, we are in the habit of acquiring it as a result of nominalism. We can not just instantly rid ourselves of our nominalist society. Even if we could, we are creatures which, due to our biology, have a strong dependence upon society and so will always, in this life, be partly dependent upon nominalism as a stepping stone to actual wealth. The problem must be managed. We shall have an overview of the entire process of how we diverge from actualism into nominalism before looking more specifically at each aspect. We must choose actual economic growth if we are to create a sustainable society.

THE FIRST PRINCIPLE: UNCERTAINTY

The Uncertainty Principle applies to economic measurement, meaning the measurement of rational behaviour can alter our definition of rationality. By measuring our economic activity with money we can alter our perception of rationality and suffer great losses, perhaps even our society, our freedoms, our joy or our planet.

Economics, which deals with the production and distribution of resources, attempts to analyze how rational people should behave. It studies rational behaviour using methodical analyses of supply and demand. But the free market mechanisms of the invisible hand require that economic participants have freedom of choice, that they are free to make choices of their own design. This also requires that they participate in the economy of their own free choice. Yet many times, at least almost all of the time in the modern economy, the choice to participate in an economy is largely due to duress. Much of our ability to protest our economic participation is silenced.

Consent comes in three varieties: fair agreement, duress and consent from silence. Consent from fair agreement is where both parties to an agreement know all of the variables in an economic exchange, see no foul play in them and freely agree. Consent from duress is where one or both parties verbally agree in order to meet some dire need such as a mortgage payment but feel pressured or uniformed. Consent from silence happens where at least one or both of the parties is involved without verbal consent due to ignorance of parts or the whole of the agreement, or just being quiet about objections.

A perfect currency would be one where cash value equals real value, one that is fair. However, a perfect currency with value has never existed and may never exist. Even in heaven, where everyone has wealth beyond measure, people will be fair but currency may not be needed there. And in Hell, where people are in bonds of misery, currency may not be in use either. Perhaps purgatory could provide a perfect currency and allow men to purge the bad economic habits they developed in this life. But in this life, any currency in use is imperfect. While other books in this series use the word currency to describe other communicative symbols, in this economics book currency refers to money.

Silence is consent is a cliché but we all follow it. As a hypothetical situation you are in a small garment shop and spy seven candies in a bowl by the register. You are bored and hungry so you call out asking if it is OK to have a candy. No one answers so after a minute of waiting you eat a candy. The shop keeper then comes out, furious. She has 7 young children, a set of young quadruplets and a set of triplets. Her customers are so cheap she could not afford Christmas presents so all the kids think they are bad. She wants to take them out for a special walk in the park but